Fired nurse says hospice falsified records

San Diego  A federal lawsuit made public this week against San Diego Hospice alleged that the organization actively worked to circumvent Medicare reimbursement guidelines and make patients appear sicker than they really were.

It casts a different light on the hospice’s problems than the one portrayed in recent months by Kathleen Pacurar, the organization’s chief executive officer.

She acknowledged in November that the hospice had made mistakes in admissions out of a sense of compassion for suffering patients. But the lawsuit alleged a far more active role by workers to falsify patient records so they would qualify for Medicare payments.

Through a spokeswoman, the executive declined to comment on the federal lawsuit, except to say that San Diego Hospice was only notified of its existence “in the last 24 hours.”

Correction

The original version of this story said that the federal government had joined the fired nurse's lawsuit. That determination apparently has not yet been made, and the story has been changed to reflect that.

The suit, filed under the Federal False Claims Act by a former San Diego Hospice nurse, comes as the hospice works in bankruptcy court to liquidate its assets. It plans to transfer most of its 430 current patients and employees to Scripps Health, which stepped forward at the hospice’s request to soften the collapse of what was the region’s largest provider of end-of-life care.

Chris Van Gorder, chief executive of Scripps Health, said in an email Thursday evening that the lawsuit would not slow down the health giant’s move to begin transferring the hospice’s patients, and hiring its employees, as soon as possible. He said that Scripps is offering hospice services under its own license, obtained in the last few weeks by purchasing a small operation in Poway.

“We are not purchasing San Diego Hospice nor are we a successor organization,” Van Gorder said. “It does not change anything having to do with Scripps’ plans because the fact remains that San Diego Hospice is in bankruptcy because they no longer have the funds or cash-flow to remain in business Scripps needs to move forward to make sure that (its) patients referred to San Diego Hospice will not have their care disrupted.”

The suit, unsealed Tuesday, was brought by former San Diego Hospice nurse Lori Rachac, who said she was fired in January 2011 after she complained about the facility’s lenient policies for admitting patients and engaging in false record-keeping.

One month later, according to the lawsuit, the nurse provided information to the government. That same month, according to previous statements from Pacurar, Medicare began auditing the hospice, a process that led to its financial problems and remains unresolved.

Rachac and one of her lawyers declined to comment Thursday on the suit, as did a prosecutor with the U.S. Attorney’s Office in San Diego. A lawyer for the hospice also did not want to comment.

Under the False Claims Act used to file suit against the hospice, citizens are allowed to file claims on behalf of the U.S. government. If they win, plaintiffs can get 15 percent to 30 percent of the total amount of money recovered.

Such suits are always filed under seal and the government is given time to review them and decide if they will join in. It appears the government has not yet decided whether to intervene.

In November, Pacurar cited an “open access” policy by the hospice to extend care to many patients who did not technically meet Medicare’s guidelines. At the time, the government did not question billings for reimbursement, which is about $170 per patient per day, she said.

“Suddenly, there’s a policeman there, and they start writing tickets for everybody. It’s not like the rules change; they just started being enforced,” Pacurar said in November.

The lawsuit directly cited the open access policy, saying that it was created in 2005.

Medicare limits hospice coverage to patients who have six months or less to live and requires a condition reassessment every 15 days and recertification every 60 days.

But Rachac, who worked at San Diego Hospice from 2000 to 2005 and again from 2009 until she was fired, alleged in the lawsuit that the hospice worked to recertify patients even if there was no evidence that they were truly dying.

Management and doctors “made suggestions to staff about what phrases to use to disguise the fact that a patient was not declining or was even improving,” the suit said. When nurses declined to alter their descriptions, a hospice official would rewrite the recertification summaries, the suit said.

That practice, according to the lawsuit, led one nurse to say at a meeting, “What is this, creative writing class?” In one example, Rachac said she had a patient who was improving and had gone shopping so she could cook Thanksgiving dinner for her family. When she wrote the patient was gaining weight, a doctor suggested the record should say the weight gain was because the patient was retaining fluid, a condition that indicated she was not improving, the lawsuit said.

In the lawsuit, the nurse estimated that at any one time about 40 percent of the patients at San Diego Hospice were ineligible for services.

The lawsuit quoted a Dec. 8, 2005, memo to the staff instructing that admissions workers will “always keep ‘yes’ at the forefront while speaking with and/or assessing any patient” referred to the facility.

It also said that the hospice’s medical director rewrote the criteria widely used by hospices around the country for determining if patients qualify for care so that virtually all patients would be admitted to the San Diego Hospice.

In addition, the recertification summaries done on patients, which are used to update their health and progress, were manipulated, the suit said.

Rachac said her complaints in 2009 about the admissions and retention policies were ignored. In 2010, she received a disciplinary letter that said in part that her disagreement with “the philosophy of admission criteria” was one of the reasons for her discipline, the suit said.

The suit also took Pacurar to task for a previous comment that the government’s audit was a wake-up call for the hospice.

“Pacurar failed to disclose that (Rachac), who had opposed the illegal practices, had been terminated and silenced,” the lawsuit stated.